After Tax Canada / Child care tax savingsVersion française
Child care tax savings calculator (2026)
Child care is a deduction, not a credit: every deductible dollar cuts your taxable income by a dollar. But only the least of three limits is deductible: what you paid, the per-child caps, and two-thirds of your earned income. Enter your income, your expenses, and your children to see the exact tax saving, federal and provincial, for every province.
The CRA generally requires the lower-income spouse to claim the deduction. Enter the lower earner's income here. Leave the spouse field blank if you are a single parent.
Ontario · 2026
$2,398$2,398 back on $12,000 of child care
Effective saving rate: 30.0%
$200 a month back
What you can deduct
| Child care expenses paid | $12,000 |
| Per-child caps | $8,000 |
| Two-thirds of your earned income | $66,667 |
| Deductible amount | $8,000 |
1 under 7 x $8,000, 0 ages 7 to 16 x $5,000, 0 with a disability x $11,000
The per-child caps are the binding limit: you paid more than the caps allow, so only the capped amount is deductible. The rest cannot be carried forward to a later year.
Where the savings come from
| Federal tax saved | $1,640 |
| Provincial tax saved | $758 |
| Total tax saved | $2,398 |
| What the child care really costs you | $9,602 |
Child care expenses are a deduction from income, not a credit: they reduce your taxable income, so the tax you save is your income tax on your income minus your income tax on (income minus the deductible amount). CPP/QPP and EI are not reduced by the deduction.
The expenses leave your pocket, then the tax savings come back as a refund (or smaller balance owing) when you file, so the out-of-pocket cost is the expenses minus the savings.
How the deduction works
Claim it on Form T778 and line 21400 of your federal return. Each child must have net income of no more than the basic personal amount ($16,452 in 2026), and the expenses must be for care that let you work, carry on a business, or study. In a few situations the higher earner can claim instead: when the lower-income spouse is enrolled full-time at a designated educational institution, is unable to care for the children because of an infirmity, has been in prison for at least two weeks, or the parents have been living separate for at least 90 days because of a breakdown. Quebec's refundable tax credit for childcare expenses and Ontario's CARE tax credit are separate programs and are not included here: they can add to the saving above.
Make your take-home work harder
Your paycheque is only half the story. These are the account types Canadians use to put after-tax money to work. What follows is factual information, not financial advice.
High-interest savings account
A savings account that pays a higher rate than a chequing account. Money stays liquid and earns interest while you keep it.
Partner offers coming soon
Investment account
An account for buying investments such as ETFs and stocks. It can be registered (TFSA, RRSP, FHSA) or non-registered.
Partner offers coming soon
Bank account
A chequing account for daily spending and bill payments, often bundled with savings and credit products.
Partner offers coming soon
We are reviewing Canadian providers. When offers appear here, they will be clearly labelled.
Disclosure: if partner offers are listed here in the future, they will be clearly labelled, and we may earn a commission. Account descriptions are factual information, not financial advice.
More calculators
Worked examples: 2026
| Income · province | Expenses · children | Deductible | Tax saved |
|---|---|---|---|
| $100,000 · ON | $12,000 · 1 child | $8,000 | $2,398 |
| $75,000 · ON | $10,000 · 1 child | $8,000 | $2,417 |
| $100,000 · QC | $12,000 · 1 child | $8,000 | $2,885 |
| $90,000 · BC | $15,000 · 2 children | $15,000 | $4,117 |
| $20,000 · AB | $15,000 · 2 children | $13,333 | $103 |
2026 tax tables · verified 2026-09-20 · how we calculate
FAQ
How much tax do I save on $12,000 of child care?
In 2026, on a $100,000 Ontario income, $12,000 of child care for one child under 7 saves $2,398 in income tax ($1,640 federal + $758 provincial). Only $8,000 of the $12,000 is deductible: the per-child cap for a child under 7 is $8,000, and the cap is the binding limit here. The $12,000 of care really costs you $9,602 out of pocket.
How does the child care expense deduction work?
Child care expenses are a deduction from income, not a tax credit: they reduce your taxable income dollar-for-dollar, up to the least of three limits, the expenses you actually paid, the per-child caps ($8,000 under 7, $5,000 ages 7 to 16, $11,000 for a child eligible for the disability tax credit), and two-thirds of your earned income. The tax you save equals your income tax on your income minus your income tax on (income minus the deductible amount). Claim it on Form T778 and line 21400 of your federal return.
Who can claim the child care deduction?
Generally the lower-income spouse (or the single parent). The CRA requires the lower earner to claim, because the deduction is capped at two-thirds of the claimant's earned income. In a few situations the higher earner can claim instead: when the lower-income spouse is enrolled full-time at a designated educational institution, is unable to care for the children because of an infirmity, has been in prison for at least two weeks, or the parents have been living separate for at least 90 days because of a breakdown. The calculator above asks for the claiming parent's income and warns you if your spouse earns less.
What if I pay more than the caps allow?
Only the capped amount is deductible, and the rest cannot be carried forward to a later year. For example, on a $90,000 British Columbia income with two children under 7 and $15,000 of expenses, the per-child caps total $16,000, so the expenses are the binding limit and the whole $15,000 is deductible, saving $4,117. But on a $20,000 Alberta income with the same two children and the same $15,000 of expenses, two-thirds of the income is only $13,333, so only that much is deductible, saving just $103.
Do child care expenses reduce CPP or EI?
No. Child care expenses reduce income tax only: CPP/QPP and EI premiums are calculated on your employment earnings and do not change. That is why the savings above come entirely from the federal and provincial tax lines.
How are the savings different in Quebec?
Quebec's higher provincial brackets mean bigger savings: on a $100,000 income, $12,000 of child care for one child under 7 saves $2,885 in Quebec ($1,365 federal + $1,520 provincial) versus $2,398 in Ontario, an effective saving rate of 36.1% instead of 30.0%. Quebec's refundable tax credit for childcare expenses is a separate program and is not included here: it can add to the saving above.
Can I deduct child care for a child over 16?
Only if the child is eligible for the disability tax credit, in which case the $11,000 cap applies at any age, or if the child is over 16, has a mental or physical infirmity, and is dependent on you, in which case the $5,000 cap applies. A child over 16 with no infirmity and no disability amount does not generate any deduction room, and each child must have net income of no more than the basic personal amount ($16,452 in 2026).